A trading strategy where an investor borrows an asset and sells it, expecting to buy it back at a lower price to profit from the difference.
A short position, also known as 'short selling' or 'going short,' is a trading strategy where an investor sells an asset they do not currently own, typically by borrowing it from a third party. The seller's goal is to profit from a subsequent decline in the asset's price; they intend to buy the asset back at a lower price in the future to return it to the lender, pocketing the difference. This strategy carries significant risk, as potential losses are theoretically unlimited if the asset's price rises instead of falls.